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Looking for some Tit for TAT

Here’s a little factoid you may not know, gleaned from the latest Experiment Aircraft Association magazine:

In July of 1929, Transcontinental Air Transport began to offer coast-to-coast air service. It had ordered something like ten of the (then new) Ford Trimotor planes.

This was before precision GPS approaches, WAAS GPS, and even VORs. These were daytime flyers because back then luxuries like runway approach lights (like VASI units) weren’t around, either.

“What could this possibly have to do with economics?” you’re wondering.

Ah…therein lies this morning’s thinking exercise, Grasshopper.

In order to see when we are at the “top” of a market, we really oughta see some new technology come online. Like the TAT offering in July of that year, we would expect it to be a hybrid of current technologies.

But cool enough, that people would get the idea. TAT was founded on the idea of flying coast to coast. Since the airplanes couldn’t fly at night, people flew during the day, trained overnight, and then flew more the next day.

Our modern analog should become visible at some point – and if you have some dart throws (guesses) please feel free to send them along.

Oh, one other thing about TAT: Their first airplane crash occurred exactly on the same day as the (up until then) all time market high around Dow 386 and change. As Wikipedia tells is:

“On September 3, 1929 a westbound TAT flight crashed on Mt. Taylor in New Mexico, with loss of all aboard. The Associated Press said it was the first plane crash on a regular commercial land route. The September crash was first of three serious accidents for TAT over the next five months…”

And so, too, the market had a problem or several in the following five months.

It’s another “wryrony” of history to tuck away in the back of your mind, as we watch to see where the next “crash” comes from.

What happened to TAT? It became TransWorld Airlines and that became…and went in 2001.

Back from the Abyss, But for How Long?

As we noted for subscribers, the market was dangerously close to imploding in the US, but our Global Index argued (winningly) that the whole globe had now busted above the 2007 highs and so we’d be off into new territory shortly. And so, our analog to 1928 continues as we’ve been talking about it for months.

Still looking for the nutech hybrid, but for now, Japan was down one percent overnight, but the Dow is looking up a hundred (at least earlier) but we have to remain unexcited.

The reason has more to do with the US dollar, than anything else. When the dollar is up/strong, it takes less of them to bolster the Dow and the S&P or NASDAQ. But that’s OK, since it is frequently accompanies by a flight to the (relative) safety of US dollars.

Days like this, the US market looks up, but much of the move is likely to be laid off on two factors: The change in exchange rates (the dollar is a few cents weaker so it takes more of them, which makes it seem like the price of the Dow is going up) while the other factor is the jobs numbers from Challenger just out:

EMPLOYERS SHED 53,041 IN JANUARY;40% DUE TO DROP IN OIL PRICESCHICAGO, February 5, 2015 – Job cut announcements surged to their highest level in nearly two years, as falling oil prices prompted cost-cutting efforts in energy and related industries.

In all, U.S.-based employers announced plans to shed 53,041 jobs from their payrolls to start 2015; with 40 percent of those directly related to oil prices.

The January total was up 63 percent from the 32,640 planned layoffs announced in December, according to the report on monthly job cuts released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

Last month’s figure was 18 percent higher than the same month a year ago, when employers announced job cuts totaling 45,107. Last month, in fact, saw the highest monthly job-cut tally since February 2013 (55,356) and the highest January total since 2012, when employers announced 53,486 job cuts to begin the new year.

Of the 53,041 job cuts announced in January, 21,322 were directly attributed to the recent and sharp decline in oil prices. Most of these cuts occurred in the energy industry, where employers announced a total of 20,193 layoffs (19,722 of which were directly attributed to oil prices).

The January total is 42 percent higher than the 14,262 job cuts announced by the energy industry in all of 2014.

The price of oil is stabilizing around $50, at least momentarily, as it looks like we’re not sailing off the edge of the world just yet. And with that Gold and Silver have become range bound in the $1,250-$1,320 area for gold while silver is in the $17-$18 range.

I anxious tell new readers we bought our lone coin of each at $276 for the yeller dog and $6.96-7.07 for the tarnishing stuff…and both in the long term have outperformed not only banks but Savings Bonds and the like.

Oh, sure, real estate too, but with interest rates so low, we’re back to thinking about moving again…and Elaine’s gone so far as to start looking for her VA loan benefits, which she’s never used.

(Advice to young men: When you meet a woman who’s a babe AND can field-strip an M-16, don’t be stupid and mess it up. The investment in partnering is the biggest one you’ll ever make.)

The Damn Baltic Dry

Sure, maybe some of the index has to do with oil prices being low..that’s a big factor in moving goods around the globalist’s chessboard. But the index this morning is down another five points to 564 and correct me if I’m wrong, but did it get that low in the 2009 bottom? I don’t think so, but I will have to go data sniping and report back.

This runs ahead of markets by three to six months, typically.

Enjoy the 100+ rally futures are gambling on, while you can. What could screw up the works?

Waiting for the Next War

Russia has turned course on interest rates, but the combined effects of sanctions are deeply undermining the Russia economy. At some point, Russia will likely step back and reconsider the events of 1989 when the wall came down.

Instead, they might begin to see the historical expansionism of the EU and “go Kissinger” – and start talking amongst themselves about falling dominos. Unlike Kissinger’s rants, this one may be correct and the Russian memories of the Great War and defending Moscow at all costs…well, cornered animals and all that.

So are American foreign policy wonks really thinking Russia is going to give up superpower status with a lay down?

“EMPLOYERS SHED 53,041 IN JANUARY; 40% DUE TO DROP IN OIL PRICES” and 60% ’cause Christmas is over.

“So are American foreign policy wonks really thinking Russia is going to give up superpower status with a lay down?” Hah! the way the US government is decimating it’s military – no reason for the Russians – who can match missile for missile – to worry about US.

Hi George,
I sold my doomstead in N.CA. and moved myself, two dogs and two horses up here to Port Orchard, WA. Have a nice place on 2.5 acres, park like setting surrounded by cedar, birch, hemlock, and close to everything. Gave up on waiting for doom! I’ll be 70 on my next birthday, so after 15 years of prepping, decided to just live a little. Whatever happens, happens.

sorry to bother again my daughter called about the defecating things of obamacare she cant get verified , if i was was on the all 6 pm news i would tell everyone we need a better health plan and a better non tax plan

i agree to disagree with you ,real estate rentals if you had invested in them like i did back then when you had cash to pay for them like i did , real estate would give you 10 % a year ,which you probably should have and put all cost in and i would be still be making 8-9 % a year better than anything except war and bankers and iam not into any of those 2 ,but now i have the best all of worlds which putting your and others methods for survival off land i spent very little and reap much

NO it has nothing to do with any strike. The BDI index plots the movement of ships into and out off US ports. When the index is down it means the US economy is not as reported by the Stats, Oh! do you mean the stats are fabricated? well I got to tell you I am on the outside looking in and she is not a pretty picture.
David
Down under